Usually the transformation is calculated outside of the shader, because the shader has to do it repeatedly for each vertex and you have a much better control of the calculations this way. You can also optimize it (e.g. with SSE) for max performance and so the CPU and GPU work perfectly side by side.
There is a nice article from Jari Komppa about this topic: http://sol.gfxile.net/instancing.html
MausGamesMember Since 11 Apr 2012
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